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Income Tax Appellate Tribunal, KOLKATA BENCH ‘C’, KOLKATA
Before: Shri P. M. Jagtap, A.M. & Shri S.S.Viswanethra Ravi, J.M.)
ORDER Per Shri S.S.Viswanethra Ravi, J.M.
This appeal by the revenue against the order dated 17-0-2009 passed by the Commissioner of appeals against the assessment order framed by the AO framed under section 144 /147 of that act for the assessment years 2004 2005.
The only issue in this appeal is as to whether the Commissioner of appeals has given an opportunity to the revenue in respect of proof showing the difference arose between the professional receipts as per TDS certificate and professional receipts as shown in the P&L account.
The brief facts of the case and that that the assessee is a law firm and filed its return on 29-10-2004 declaring income of Rs.6,01,620/- for the year under consideration. The AO on verification of records found that a sum of Rs. 36,58,351/- was credited to the profit and loss account and on account of collection of bills as per the TDS certificates it was noticed at Rs.66,85,797/- under the same
2 M/s. Mukherjee & Biswas head. Thereby the assessing officer reopened the assessment under section 147 and a notice under section 148 was issued to the assessee on 12th of February 2008 in the response to which the assessee requested that assessing officer to treat the return filed under section 139 (1) as the return under section 148 of the act. Thereafter the assessing officer issued notices under section 142(1) and 143(2) of the act. In response to which, the authorised representative appeared on 2nd September 2008 and the authorised representative failed to produce any books of accounts on nor any passbooks/ statements as sought under section 142(1) of the act. The contention of the assessing officer was that the authorised representative sought adjournments from time to time on 22nd September 2008 and 16th October 2008 and also on 23rd October 2008 but she could not produce any relevant material as sought by him under section 142(1) of that act. The assessing officer also contends in spite of issuing show cause notice the assessee failed to produce any documentary evidence as requested. Thereby the assessing officer added an amount of the Rs30,27,446 being the difference between receipts shown in profit and loss account and as per bills of collection vide TDS certificate treating the same unexplained and unaccounted, thereby added to the income of the assessee.
In first appeal before the Commissioner of appeals, the assessee contended that it would receive amounts from its clients by deducting tax at source on which the assessee would incurre all other expenses like Court fee, Counsel fee, Court expenses and all other miscellaneous expenses etc.. which are all done from column out of pocket expenses i.e to an extent of Rs.66,85,797/- which is not at all the income of the of the assessee. Further contended that under column in pocket expenses as shown is what exactly the income of the assesse i.e to an extent of Rs.36,58,351/- in support the assessee filed the fund utilisation statement before the Commissioner of appeals and also copy of challans showing the tax so 3 M/s. Mukherjee & Biswas Government, basing on which the Commissioner of appeals gave relief to assessee thereby deleting the addition made by the assessing officer by observing as under:
“5. I have carefully considered the submission of the appellant and seen the details / documents filed. As per the TDS credit claimed, the gross clientele receipts of the appellant should be of Rs.66,85,797/-. However, the said receipts were bi-furcated by the appellant under two heads, viz. (i) receipts towards reimbursement of actual expenses incurred for counsel fees, stamp and court fees etc. termed as 'Out of pocket expenses' of Rs.30,27,446/- and (ii) appellant's own professional receipts termed as 'In pocket expenses' of Rs.36,58,351/-. The claim of the appellant that 'out pocket expenses' of Rs.30,27,446/- were utilized towards payments to the solicitors and advocates is found correct. The ARs of the appellant have filed a 'Fund Utilization Statement' for the relevant year, as per which, the appellant made total 'council payment' at Rs.53,71,524/-, inclusive of Rs.30,27,446/- as above. The ARs have filed a list showing payments made to 35 numbers Solicitors and Advocates and tax deducted at source on such payments. As per the said list, a total tax of Rs.2,82,013/- was deducted at source against total payments made at Rs.53,71,534/-. The ARs also produced copy of challans showing that the tax so deducted was deposited in Government account from time to time. Under the circumstances, the addition of Rs.30,27,446/- made by the AO as unaccounted professional income is not maintainable, hence deleted.”
At the outset it was observed the ld. CIT(A) has given relief to the assesse basing on the material evidence filed a Fund utilisation Statement showing payments made to Counsel and copies of challans showing deposits in the account of Government admittedly both the documents were not available before the AO. The ld. DR before us prayed for to restore the issue to AO. The ld. AR raised no objection in restoring the same. We, therefore, set aside the impugned order of the CIT-A and remit the matter to AO with a direction to decide the same by giving the assessee proper and sufficient opportunity of being
4 M/s. Mukherjee & Biswas heard. It is pertinent to mention that the assessee shall co-operate with the AO without seeking any adjourments.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
Order Pronounced in the Open Court on 21.07.2016